Invesco India’s new consumption fund is now fully invested. Manish has created four categories of companies in this portfolio: (1) Monopolies/oligopolies (eg airlines, telecom), (2) Established leaders in their segments, who continue to behave like challengers (3) Challengers who are gaining market share and (4) Aggregators – in distribution or in manufacturing.
About 2/3rd of the portfolio is allocated to the first 3 categories and the balance third to aggregators in distribution and in manufacturing.
Manish is overweight consumer discretionary segments like travel, healthcare and platforms, is neutral weight on auto and is underweight consumer staples.
He believes distribution aggregators are a better way to play consumer staples rather than the big manufacturers.
The portfolio has 31-32 stocks, has a 65% active share and has around 60% allocation to mid and small cap vs the benchmark which is large cap heavy. Manish believes this portfolio construct is not only quite different but is also geared towards higher alpha generation.
Consumption is a structural domestic growth story that is getting incremental tailwinds from Government policies and measures, which are creating exciting delta for a vast range of consumer discretionary segments –thus offering investors a sound long term growth oriented investment opportunity.